China Adjusts Natural Gas Import Tax Preferences

To local financial authorities, state tax bureaus, Guangdong Sub-Administration of China Customs, and province-level customs administrations:

We hereby decides to make the following adjustments to some regulations set forth in the Notice of CaiGuanShui [2011] No.39 on the return of import VAT for the natural gas imports during 2011-2020 and under the "Central Asian Gas" Project by the end of 2010, as follow:

1. As of July 1, 2013, the liquefied gas sales pricing set in the [2011] No.39 Notice shall be changed to CNY 31.45/GJ (see the Annex 2 thereto) and the pipeline gas sales pricing therein shall be changed to CNY 1.11/cubic meter (see the Annex 3 thereto).

2. In the Annex "Provisional Regulations on Natural Gas Import VAT Return" to the [2011] No.39 Notice, its second section shall be revised into "The natural gas import projects permitted by the state, described herein, shall refer to the gas pipeline projects and liquefied gas receiver projects approved by the National Development & Reform Commission".

3. Some projects are added to the coverage of the import tax preferences, including:

(1) The project of China-Myanmar Natural Gas Pipelines: its import scale is 10 billion cubic meters per annum; the Chinese importers are China National United Oil Corporation and PetroChina International Yunnan Company Limited; the preferential time starts on July 1, 2013.

(2) Zhejiang LNG project: its import scale is 3.0 million tons per annum; the importers are CNOOC Gas & Power Group and CNOOC Zhejiang Ningbo LNG Co., Ltd.; the preferential time starts on September 1, 2012.

(3) Guangdong Zhuhai LNG project: its import scale is 3.5 million tons per annum; the importers are CNOOC Gas & Power Group and Guangdong Zhuhai Jinwan LNG Co., Ltd.; the preferential time starts on August 1, 2013.



The Ministry of Finance of China
The General Administration of Customs of China
The State Administration of Taxation of China

November 7, 2013